SINGAPORE (July 27): First Sponsor Group, the mixed property developer in the Netherlands and China, reported 2Q18 earnings of $12.1 million. This brings 1H18 earnings to $29.2 million, up 23.7% from last year.
Revenue for 2Q18 fell 21.2% to $44.1 million due mainly to a $38.6 million decline in revenue from sale of properties led by recognition of revenue from fewer units in the Millennium Waterfront project.
The decrease was however partially offset by the increase in revenue from property financing, hotel operations and rental income from investment properties of $18.1 million, $8.5 million and $0.1 million respectively.
The significant increase mainly arose from the recognition of net penalty interest income of $5.1 million on the receipt of net auction proceeds by the court in June linked to the successful enforcement on two of the Case 2 defaulted loans.
Revenue from hotel operations was higher due mainly to a full quarter contribution from the 24.7%-owned Hilton Rotterdam hotel which was leased by the group since February, as well as the Wenjiang hotspring which started operations in October 2017.
However, cost of sales fell 48.6% to $16.2 million while net other expenses fell 45.8% to $3.3 million.
In its outlook, First Sponsor says 2018 looks set to be the record year for the group’s China property financing business segment. Meanwhile, the group’s efforts in building up a strong recurrent income property holding portfolio is shaping up well.
First Sponsor’s board has approved an interim tax-exempt (one-tier) cash dividend of 1 cent per share.
As at 12.01pm, shares in First Sponsor are trading 2 cents higher ar $1.29.
